US - 2010 Predictions

US - 2010 Predictions

Postby LenaHuat » Tue Dec 15, 2009 4:46 pm

I guffawed when I read Dr Tony Tan's interview with CNBC's Maria Bartiromo. We count so much on the largesse of the Americians :-
I had to laugh when he quoted Winston Churchill as one of the reasons he’s optimistic about America in particular: “You can always count on the Americans to do the right thing — after they’ve tried everything else.”


Complete interview is here :-
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Re: US - 2010 Predictions

Postby kennynah » Tue Dec 15, 2009 5:52 pm

I (Maria Bartiromo) had to laugh when he quoted Winston Churchill as one of the reasons he’s optimistic about America in particular: “You can always count on the Americans to do the right thing — after they’ve tried everything else.”

I am embarrassed....
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Re: US - 2010 Predictions

Postby LenaHuat » Thu Dec 17, 2009 9:30 am

Today is the 17 Dec 2009 and this survey shows Americans are the most pessimistic since Jan 2009.
Can we count on them to do the right thing? :-
http://www.cnbc.com/id/34450869
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Re: US - 2010 Predictions

Postby millionairemind » Thu Dec 17, 2009 9:51 am

LenaHuat wrote:Today is the 17 Dec 2009 and this survey shows Americans are the most pessimistic since Jan 2009.
Can we count on them to do the right thing? :-
http://www.cnbc.com/id/34450869


So do you want them to spend their way out of trouble (and save the world), or start saving and deleveraging their debts (and give us a double dip)? ;)
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Re: US - 2010 Predictions

Postby LenaHuat » Thu Dec 17, 2009 8:16 pm

IMHO, it's difficult to be optimistic abt 1Q2010. I've posted this so that I can track its expiry:-
NEW YORK (CNNMoney.com) -- The House Wednesday overwhelmingly approved extending the filing deadline for unemployment benefits and the COBRA health coverage subsidy through the end of February.

Later, the House narrowly approved a $154 billion job creation package that would provide funding for infrastructure projects and keep teachers and emergency personnel on the job.
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Re: US - 2010 Predictions

Postby winston » Fri Dec 18, 2009 8:11 pm

Richard Bernstein's 10 Predictions For 2010

Here are my 10 guesses for how the financial markets will shape up in 2010.

1. Stock and bond market returns in the US will again be positive.

2. The US dollar is likely to meaningfully appreciate once market-driven short-term rates begin to rise.

3. US dollar “carry trades” could get killed as 2010 progresses and the US dollar appreciates. Once accounting for leverage, hedge fund performance will likely trail long-only equity performance.

4. The Fed will spend the second half of the year trying to catch up to, and flatten, the yield curve. Short-term rates could increase more than investors currently think. Long-term rates could rise quite a bit in the first part of the year as inflation finally begins to appear, but are likely to fall during the second half of the year when the markets realize the Fed is serious about fighting inflation. The curve is likely to be much flatter one year from today than it is currently.

5. Corporate profits are likely to explode to the upside during 2010. Trailing four-quarter S&P 500 reported earnings growth could exceed 100%. Investors still seem to be under-estimating the operating and financial leverage that is built into corporate profits.

6. Employment in the US will probably continue to improve. Consumer Discretionary stocks will likely be among the best performing sectors.

7. Treasuries will probably underperform stocks. That underperformance is unfortunately likely to reinforce both individual and institutional investors’ views that it is wise to be under-diversified.

8. Small cap value, I think, will be the US’s best performing size/style segment. Small banks outperformance might be the biggest surprise for 2010.

9. Financial regulation will progress, but the bull market will probably aid politicians’ “forgetfulness”. As a result, new regulation could be relatively meaningless. In my opinion, serious regulation won’t occur until after the next downturn, which could be worse if no meaningful new regulation is implemented in 2010.

10. I think the Democrats will do better in the 2010 mid-term elections than people currently think they will. It seems very likely to me that in December 2010, investors will look back on the year and realize that monetary and fiscal policy stimulus still works.

http://www.businessinsider.com/richard- ... 10-2009-12
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Re: US - 2010 Predictions

Postby winston » Tue Dec 22, 2009 5:52 pm

Doug Kass’s Top 20 Surprises for 2010

1. There is a glaring upside to first-quarter 2010 corporate profits (up 100% year over year) and first-quarter 2010 GDP (up 4.5%). It grows clear that, owing to continued draconian cost cuts, coupled with a series of positive economic releases and a long list of company profit guidance increases in mid to late January and early February, there is a very large upside to first-quarter GDP (up 4.5%) and, even more important, to S&P profit growth (which doubles!).

The upside on both counts is in sharp contrast to more muted growth expectations. While corporate managers, economists and strategists raise earnings per share, full-year growth and S&P target estimates, surprisingly, the U.S. equity market fails to respond positively to the much better growth dynamic, and the S&P 500 remains tightly range-bound (between 1,050 and 1,150) into spring 2010.

2. Housing and jobs fail to revive. An outsized first-quarter 2010 GDP (up 4.5.%) print is achieved despite a still moribund housing market and without any meaningful improvement in the labor market (excluding the increase in census workers) as corporations continue to cut costs and show little commitment to adding permanent employees.

3. The U.S. dollar explodes higher. After dropping by over 40% from 2001 to 2008, the U.S. dollar continued to spiral lower in the last nine months of 2009. Our currency’s recent strength will persist, however, surprising most market participants by continuing to rally into first quarter 2010. In fact, the U.S. dollar will be the strongest major world currency during the first three or four months of the new year.

4. The price of gold topples. Gold’s price plummets to $900 an ounce by the beginning of second quarter 2010. Unhedged, publicly held gold companies report large losses, and the gold sector lies at the bottom of all major sector performers. Hedge fund manager John Paulson abandons his plan to bring a new dedicated gold hedge fund to market.

5. Central banks tighten earlier than expected. China, facing reported inflation approaching 5%, tightens monetary and fiscal policy in March, a month ahead of a Fed tightening of 50 basis points, which, with the benefit of hindsight, is a policy mistake.

6. A Middle East peace is upended due to an attack by Israel on Iran. Israel attacks Iran’s nuclear facilities before midyear. An already comatose U.S. consumer falls back on its heels, retail spending plummets, and the personal savings rate approaches 10%. The first-quarter spike in domestic growth is short-lived as GDP abruptly stalls.

7. Stocks drop by 10% in the first half of next year. In the face of renewed geopolitical tensions and reduced worldwide growth expectations, stocks drop as the threat of an economic double-dip grows. Surprisingly, though, the drop in the major indices is contained, and the U.S. stock market retreats by less than 10% from year-end 2009 levels.

8. Goldman Sachs goes private. Goldman Sachs stock drops back to $125 to $130 a share, within $15 of the warrant exercise price that Warren Buffett received in Berkshire Hathaway’s (BRKA) late 2008 investment in Goldman Sachs. Sick of the unrelenting compensation outcry, government jawboning and associated populist pressures, Warren Buffett teams up with Goldman Sachs to take the investment firm private. The deal is completed by year-end.

9. Second-half 2010 GDP growth turns flat. The Goldman Sachs transaction stabilizes the markets, which are stunned by an extended Mideast conflict that continues throughout the summer and into the early fall.

While a diplomatic initiative led by the U.S. serves to calm Mideast tensions, flat second-half U.S. GDP growth and a still high 9.5% to 10.0% unemployment rate caps the U.S. stock market’s upside and leads to a very dull second half, during which share prices have virtually flatlined (with surprisingly limited rallies and corrections throughout the entire six-month period). For the full year, the S&P 500 exhibits a 10% decline vs. the general consensus of leading strategists for about a 10% rise in the major indices.

10. Rate-sensitive stocks outperform; metals underperform. Utilities are the best performing sector in the U.S. stock market in 2010; gold stocks are the worst performing group, with consumer discretionary coming in as a close second.

11. Treasury yields fall. The yield of the 10-year U.S. note drops from 4% at the end of the first quarter to under 3% by the summer and ends the year at approximately the same level (3%). Despite the current consensus that higher inflation and interest rates will weigh on the fixed-income markets, bonds surprisingly outperform stocks in 2010.

A plethora of specialized domestic and non-U.S. fixed-income exchange-traded funds are introduced throughout the year, setting the stage for a vast speculative top in bond prices, but that is a late 2011 issue.

12. Warren Buffett steps down. Warren Buffett announces that he is handing over the investment reins to a Berkshire outsider and that he plans to also announce his in-house successor as chief operating officer by Berkshire Hathaway annual meeting in 2011.

13. Insider trading charges expand. The SEC alleges, in a broad-ranging sting, the existence of extensive exchange of information that goes well beyond Galleon’s Silicon Valley executive connections. Several well-known long-only mutual funds are implicated in the sting, which reveals that they have consistently received privileged information from some of the largest public companies over the past decade.

14. The SEC launches an assault on mutual fund expenses. The SEC restricts 12b-1 mutual fund fees. In response to the proposal, asset management stocks crater.

15. The SEC restricts short-selling. The SEC announces major short-selling bans after stocks sag in the second quarter.

16. More hedge fund tumult emerges. Two of the most successful hedge fund managers extant announce their retirement and fund closures. One exits based on performance problems, the other based on legal problems.

17. Pandit is out and Cohen is in at Citigroup (C). Citigroup’s Vikram Pandit is replaced by former Shearson Lehman Brothers Chairman Peter Cohen. Cohen replaces a number of senior Citigroup executives with Ramius Partners colleagues. Sandy Weill rejoins Citigroup as a senior consultant.

18. A weakened Republican party is in disarray. Sarah Palin announces that she has separated from her husband, leaving the Republican party firmly in the hands of former Massachusetts Governor Mitt Romney. An improving economy in early 2010 elevates President Obama’s popularity back to pre-inauguration levels, and, despite the market’s second-quarter decline, the country comes together after the Middle East conflict, producing a tidal wave of populism that moves ever more dramatically in legislation and spirit. With the Democratic tsunami (part deux) revived, the party wins November midterm elections by a landslide.

19. Tiger Woods makes a comeback. Tiger Woods and his wife reconcile in early 2010, and he returns earlier than expected to the PGA Tour. After announcing that his wife is pregnant with their third child, both the PGA Tour’s and Tiger Woods’ popularity rise to record levels, and the golfer signs a series of new commercial contracts that insure him a record $150 million of endorsement income in 2011.

20. The New York Yankees are sold to a Jack Welch-led investor group. The Steinbrenner family decides, for estate purposes, to sell the New York Yankees to a group headed by former General Electric (GE) Chairman Jack Welch.

Source: Randall Forsyth, Barron’s, December 21, 2009.

http://blogs.barrons.com/stockstowatcht ... gers-back/
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Re: US - 2010 Predictions

Postby winston » Thu Dec 24, 2009 2:41 pm

Suze Orman's economic optimism

The personal-finance guru talks about the future of the economy, real estate no-nos and bond investing.

Posted by Kim Peterson on Wednesday, December 23, 2009 2:59 PM

Suze Orman is very good at what she does. Need evidence? Look no further than the multimillion-dollar empire she built by giving personal-finance advice to ordinary folks.

She knows her stuff. But when it comes to talking about the national economy, she's more smiles than specifics. CNBC host Larry Kudlow asked Orman about the subject recently (video below) and billed the interview as "the world according to Suze Orman."

Orman's view of the economy is quite simple: We'll be OK next year and the year after that. We could get into trouble again in 2012 and 2013. But in 2015 we will become the America we have always hoped for. Here's the video:

http://articles.moneycentral.msn.com/In ... =1,1505642
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Re: US - 2010 Predictions

Postby winston » Sun Dec 27, 2009 5:42 pm

Predictions 2010: Stocks, Jobs, Inflation & More By: Dennis Kneale

A funny thing happened on the way to Armageddon.

One year ago, the world braced for total economic collapse. We writhed in shock and fear in the wake of Bear Stearns-Lehman Brothers-AIG-Merrill Lynch-Wachovia-Countrywide et al.

http://www.cnbc.com/id/34124400
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Re: US - 2010 Predictions

Postby winston » Sun Dec 27, 2009 5:45 pm

Predictions 2010: Markets & Economy By: Patti Domm

This year's forecast is a wish list. OK, I know that's cheating.

Everyone else is throwing darts at the future, but can you honestly think of even a half dozen prognosticators that have been totally right in the last two years? Maybe the gloom and doom crowd were scoring big early on, but many of them missed the stock market rally.

So here goes 2010:

1. Economy.

Economists say unemployment should peak in the first part of the year, somewhere just shy of 11 percent. What I hope is that the hiring is not just from short-lived stimulus spending, and that companies actually see the benefit of adding to their payrolls as soon as Q1.

2. Trouble ahead.

We all know there are more catalysts for crisis out there, whether its commercial real estate or some country debt. I hope the Fed has it right, and it is keeping rates low to heal the system, not just firing up another recipe for future disasters.

3. Double Dip.

It's possible there could be a double dip recession, sooner or later, so let's hope that's wrong. The frailty of the recovery depends so much on confidence. Businesses have to realize there may be opportunities now if they open their check books. They can go along way to help consumers come out of their shells.

4. Swamped in debt.

So far, the markets have digested huge amounts of new Treasury issuance that the U.S. government needs to pay its debt. At some point, the cost to borrow is going to rise, and it makes sense it happens in the next year. Let's hope this shift and the unwinding of Fed policy does not result in calamity.

5. Green shoots.

The stock market and credit markets have been real green shoots in this recovery. But can that continue? As far as stocks go, many analysts think 2010 is an up and down year, ending not far away from the highs of 2009. We can hope that's not the best case scenario, but it just may be.

http://www.cnbc.com/id/34124419
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